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Talks between the Newspaper Guild of New York and the New York Times have been heated. In late March, the union forced the paper to drop its proposal to extend the workweek at the Times to 40 hours​—​any work over 35 hours and the paper has to pay overtime. The Times’s management bitterly noted that the shorter workweek costs real money and that “eight-hour days are the norm . . . in much of the world outside The Times.”

Following on the heels of this victory, the guild set its sights on another management proposal: transitioning workers out of a traditional pension plan and into a defined contribution plan, such as a 401(k). Again, this is now the norm in much of the world outside the Times, but the union is having none of it. On April 18, New York Times guild members began circulating a YouTube video featuring some of the paper’s most senior staff excoriating Times publisher Arthur O. Sulzberger Jr. and “corporate management.” The pension move is an affront because “we’ve already been investing in helping save the paper,” said Times columnist Jim Dwyer.

If the guild has been helping the paper out of its dire financial straits, their pension plan doesn’t reflect that. According to the paper’s last annual report, the company pension plans are $522 million underfunded and have enough money to cover only 77 percent of the plans’ liabilities. The federal government considers pension funds endangered if they are less than 80 percent funded, and 65 percent funding is the threshold below which the government declares a pension plan to be in “critical status.” That’s the point at which a fund is likely to go into an accounting tailspin and never be able to cover its obligations.

If the veteran journalists at the Times weren’t so busy trying to protect their generous benefits, they might realize there’s a story here. Union pension funds​—​particularly multi-employer plans​—​are on the verge of collapse across the country.

This problem has been building for a while, largely as a result of an aging unionized workforce. A Government Accountability Office report found that since 1998 more people have been collecting benefits from multi-employer plans than paying into them.

As bad as this sounds, new rules from the Financial Accounting Standards Board (FASB) requiring companies to disclose their pension liabilities have revealed the problems to be much worse than previously estimated.

Analysts at Credit Suisse crunched the numbers on 1,354 of the country’s 1,459 multi-employer pension plans and concluded they are collectively $369 billion short of the money needed to cover their liabilities and are only 52 percent funded. That’s more than double the $160 billion deficit previously estimated by FASB. Credit Suisse arrived at its figure by measuring the actual assets and obligations, as opposed to the plans’ “actuarial value,” an estimate that allows companies to discount their pension liabilities based on expectations of future returns that have turned out to be unrealistically optimistic.

“With multi-employer plans in bad shape, companies could get hit from a number of angles including increased contributions, difficult labor negotiations, higher withdrawal liabilities, and [mergers and acquisitions] could be impacted as acquirers have to price in the underfunding. The new insights may even change investor and rating agency opinions of certain companies,” according to Credit Suisse’s report, “Crawling Out of the Shadows: Shining a Light on Multi-employer Pension Plans.”

In other words, because of the new transparency requirements, the stock of unionized companies could take a big hit. What’s more, transparency about union pension liabilities could end up depressing entire industries. That’s because union pension plans are interconnected. If pension plans start failing in heavily unionized sectors such as construction, transportation, and supermarkets, it could have an ugly domino effect.

One of the reasons 401(k)s and defined contribution retirement plans began supplanting traditional defined benefit pension plans in the 1970s is that they had a big advantage for workers-​—​portability. Workers could quit their jobs and take their retirement plans with them. Multi-employer plans were Congress’s attempt to offer union members portability without sacrificing the advantages of being in a defined benefit plan. Unions can use collective bargaining to force companies to pool their pension plans. Workers can then move between companies—say from Ford to GM—with their pensions intact. Hence the term “multi-employer pension plans.”